What Does Scanfil Oyj's (HEL:SCANFL) Share Price Indicate?

Scanfil Oyj (HEL:SCANFL), might not be a large cap stock, but it saw a decent share price growth in the teens level on the HLSE over the last few months. As a small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Today I will analyse the most recent data on Scanfil Oyj’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Scanfil Oyj

What's the opportunity in Scanfil Oyj?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 2.40% above my intrinsic value, which means if you buy Scanfil Oyj today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is €7.13, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since Scanfil Oyj’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of Scanfil Oyj look like?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a negative profit growth of -2.7% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Scanfil Oyj. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? Currently, SCANFL appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on SCANFL for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on SCANFL should the price fluctuate below its true value.

If you want to dive deeper into Scanfil Oyj, you'd also look into what risks it is currently facing. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Scanfil Oyj.

If you are no longer interested in Scanfil Oyj, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

When trading Scanfil Oyj or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.